But what's to stop wealthy people from buying the newly built houses as yet another asset to their real estate portfolio to the exclusion of first time homeowners?
Think about this in the context of any other good. No one worries that if we build more cars, they'll all be purchased by rich car collectors. Yes, when more cars are built, a few very rich people with many cars will buy more. But the increased supply also make it more economical for everyone to buy more cars.
Secondly if a person owns a home and rents it to a second person, I'm fine with it.
The problem is that it's not legal in most parts of most cities.
Just stating that Americans love their yards/privacy and it's not so simple to fix.
Well, ok then - we want affordable housing, let's build affordable housing. Nothing's perfect. Some people prefer denser housing in a more desirable place, and some prefer more space in Cyanide Springs, Oklahoma. Both should be a choice, but currently, we limit the denser housing options way too much.
And now the Fed can’t even get the guts to lower inflation by raising interest rates because of what it’s done to the housing market.
This kind of thing happens over and over and over again, all across the US and it adds up.
Houses are built by developers whom by definition only build a project when it's a sound investment. They immediately stop building when this isn't the case.
What people who buy homes are told, though, is to essentially 'buy and hold' because it's a "good investment" that will gain value over time, even if they are not building anything or adding any value to the dwelling they inhabit.
Where I live, during the recent runup in prices, the median home gained something like $100,000 of value in a year, which is significantly more than the median household income.
https://oregoneconomicanalysis.com/2021/03/16/who-benefits-f...
Ideally, I think, home prices would be fairly stable - neither appreciating a lot, nor dropping in value. Boring. That would also make them a 'bad' investment for corporations looking to make a buck by buying and holding.
Do you expect people to buy and sell their home? It’s their home, why would selling (in the short term measured in decades) be the goal?
People primarily buy homes to live in. Any benefits of price appreciation, and/or political interests of those nearing their end of life and want to downsize/die are secondary.
If the capital appreciation is zero, then it's just the rental income, which is offset against the cost of maintaining the property and the opportunity cost from the capital outlay on the property. That's not a major problem though, as the rental price won't be able to get too high as people will simply rent or buy elsewhere (as you've reduced the other barriers to building more property)
Of course you can get rid of the appreciation by simply taxing the land (which is the thing that mainly appreciates -- the building itself typically depreciates), and get most of the way there.
As I said, at other times in this thread, the only incentive we have as an and an economy in the United States, is agreed.
As I said, at other times in this thread, the only incentive we have in this economy and in the United States, is greed.